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Armenian Defense Contractor Charged With Fraud


Armenia -- A screenshot of a National Security Service vide of the arrest of defense contractor Davit Galstian, February 1, 2021

The owner of a company supplying Armenia’s armed forces with weapons and ammunition has been arrested on fraud charges, the National Security Service (NSS) said on Monday.

The NSS said that the charges stem from a $1 million contract for the supply of artillery shells which Davit Galstian’s Mosston Engineering company signed with the Armenian Defense Ministry in 2018.

It said the company breached the contract by providing the ministry with ammunition designed for older and different artillery systems. Artillery units could not accomplish their “combat tasks” with those shells, the NSS added in a statement.

This is why, it said, NSS investigators have indicted Galstian and Mosston’s director and asked a Yerevan court to remand them in pre-trial custody. It was not immediately clear if the suspects will plead guilty to the accusations.

Nor was it clear if the NSS could also prosecute any current or former Defense Ministry officials. The statement said in this regard that the investigators are taking measures to “identify the full circle of individuals involved in the corruption scheme.”

Galstian was an adviser to Armenia’s former Defense Minister Davit Tonoyan, who was sacked in November following the war in Nagorno-Karabakh.

The security service further revealed that Galstian is also facing three other criminal investigations into his companies’ dealings with the Armenian military. But it did not give any details of those inquiries.

Galstian’s companies have been among the Defense Ministry’s leading suppliers in recent years.

Lieutenant-General Artak Davtian, who served as chief of the Armenian army’s General Staff from 2018-2020, told RFE/RL’s Armenian Service on Monday that they repeatedly failed to fulfill their contractual obligations during his tenure.

“There were quite a lot of cases where we handed back supplies, demanded their replacement or found defects and told [the contractor] to eliminate them,” Davtian said without elaborating.

Andranik Kocharian, the pro-government chairman of the Armenian parliament committee on defense and security, described the fraud accusations as credible and said they were made possible by the sackings of Tonoyan and previous NSS directors.

“Such corrupt practices are not possible without the support of high-ranking officials,” he claimed. “So let’s wait for further developments.”

Kocharian and Tonoyan traded bitter accusations in the immediate aftermath of a Russian-brokered agreement that stopped the Karabakh war on November 10.

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